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Long-Term Cryptocurrency Analysis: Break-Down or Reversal Ahead?

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From a long-term technical perspective, not much has changed in the cryptocurrency segment in the past few weeks, with only Bitcoin’s rally providing bulls something to cheer about. The bearish trend that has been dominant for months is still intact in most cases, and despite the several rally attempts, sellers always returned strong, pushing the major coins back towards the key support levels that have been tested in recent months.

The total value of the market has been stuck below $300 billion, with the exception of a few brief spikes, while capital flows were negative almost all year. In spite of the clear segment-wide selling pressure, the most important coins are still holding up above key support, and BTC’s current relative strength is a possible game-changer for the coming weeks. Should the top coins follow the relatively weaker ones, such as LTC and XMR below long-term support, a longer structural bear market could commence.

BTC/USD, Daily Chart Analysis

For now, BTC is safely above the structurally important $5850 level, and the coin broke out of the declining trend during the recent surge. That said, given the widespread selling pressure in the market, a trend change is not yet confirmed and traders shouldn’t enter full positions here, while investors should still hold on to their coins.

In the case of a breakdown below $5850, the next major support is found at $5000, while a recovery above $8400 would confirm a new uptrend. In the current broad trading range, the $7650-$7800 zone is the most important with other levels of interest at $7350, $7000, $6750, and $6250.

ETH/USD, Daily Chart Analysis

Ethereum has been showing short-term weakness compared to Bitcoin despite the fact that that the April lows are still well below the current price level. The downtrend in the coin is clearly intact, and a test of the 4360 level is now very likely, even if a bullish reversal is ahead. The long-term trend signal is neutral for ETH, while short-term the coin is on a clear sell signal. Support above the April low is found at $400 and $380, while strong resistance is ahead at $450, $500 and between $555 and $575.

Litecoin

LTC/USD, 4-Hour Chart Analysis

Litecoin continues to lead the way lower, being stuck in a long-term downtrend after failing to rally durably above the $90 support/resistance level. The $75 support is currently in focus again, and a move below that is likely, given the strong downtrend. Traders and investors shouldn’t enter new positions, with further strong resistance ahead at $100 and support found near $64-$65.

Dash

DASH/USD, 4-Hour Chart Analysis

Dash is also weak on all time-frames, trading on a new cycle low already, below the $215 support. The coin bounced back as far as $300 during the consolidation phase, but as the break-out above resistance failed, the strong downtrend remains intact. Primary support is now found at $200, while resistance is ahead at $265, near $300, and at $360.

Ripple

XRP/USD, 4-Hour Chart Analysis

Ripple experienced a hectic consolidation period, but as selling pressure remained apparent, all rally attempts failed. The coin is barely holding up above the structurally important support level near $0.42, while trading has been centered around the $0.45 level for weeks Above that, strong resistance is ahead at $0.51, $0.54, and $0.64, while the next major support zone is found between $0.30 and $0.32.

Ethereum Classic

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic continues to be very volatile and range-bound, and the coin is in a relatively stronger position compared to the other majors, trading well above the key $13-$13.50 zone. That said, the short-term setup is still bearish, and traders shouldn’t enter new positions here. Further support is found near $16, $14.50, and $11, while resistance is ahead at $18.

Monero

XMR/USD, 4-Hour Chart Analysis

Monero experienced wild counter-trend rallies after its structural break-down, similarly to Dash, but as the coin failed to recapture key resistance zones, the downtrend remains intact. Now, XMR is back near the June low, and a test of the lows, and even new lows are likely in the coming weeks, so traders and investors should stay away from the coin. Support is still found near $110 and $80, while resistance is ahead at $125, $150, and $175.

NEO

NEO/USDT, 4-Hour Chart Analysis

The strong bounce in NEO also fizzled out, and the coin drifted back towards the June lows, together with the other relatively weak coins, confirming the segment-wide downtrend. Now, a move to $25 is likely even if a reversal is close, and traders and investors should stay away from entering new positions here. Primary support is found near $2650, while resistance is ahead at $30 and $34.

IOTA

IOTA/USD, 4-Hour Chart Analysis

IOTA is stuck in a strong downtrend, and the coin is trading right at the June low, risking a structural break-down and a long-term sell signal. Barring a quick reversal, a move to $0.75 is likely, with further levels at $0.64, and $0.48, and resistance ahead at $1, $1.1, and $1.2.

EOS

EOS/USD, 4-Hour Chart Analysis

EOS is hovering above the key $6.50-$7 zone, still showing long-term technical strength, but a move below that zone would be a bearish sing, and the recent short-term relative weakness is suspicious. Traders should still not enter new positions here, while investors should hold on to their coins, with further support found at $4.50, and resistance being ahead near $9, $10, and $12.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 468 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Analysis

Crypto Update: Coins Test Swing Highs Litecoin Runs Into Resistance

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The major cryptocurrencies continue to trade with a bullish bias after establishing a new short-term uptrend this week. The top coins are all holding on to the bulk of their recent gains, even as most of them entered consolidation patterns on the heels of the strong rally in the segment. With still only Ripple lagging the broader market notably, the immediate outlook remains positive, despite the still bearish long-term picture.

LTC/USD, 4-Hour Chart Analysis

Today, the initially leading Litecoin shined again, pushing past the $50 level and hitting the long-term resistance zone near $51. As LTC is overbought due to its recent lofty gains, the coin is now only on a neutral short-term signal in our trend model, since the bearish long-term setup continues to warrant caution for bulls here.

That said, the rising short-term trend is intact, and should the coin clear the overbought momentum readings, traders could enter small, speculative positions using strict risk management rules. Support levels are now found near $47, $44, and $38, while the next major resistance zone is ahead near the $56 price level.

BTC/USD, 4-Hour Chart Analysis

Bitcoin entered a consolidation pattern today, as we expected, after touching the longer-term zone resistance zone between $4000 and $4050. The momentum indicators hint on further consolidation, and in light of hostile long-term setup, traders should wait for the overbought readings to be cleared before entering new short-term positions.

Below the initial level $3850 support, further levels are found near $3600 and just above $3450, while the next resistance zone above $4050 is ahead near $4450. The short-term uptrend is intact in BTC, and our trend model remains on a short-term buy signal.

Ethereum Tries to Form Swing Low while Ripple Fights Trendline

ETH/USD, 4-Hour Chart Analysis

Ethereum entered a shallow correction after hitting the resistance zone near $145, but the price action and the volume patterns continue to support the bullish short-term case. The $160 price level remains a viable target for bulls but the momentum indicators continue to show overbought readings. The short-term uptrend is intact and our trend model is still on a short-term buy signal as well. Support levels are found near $130 and $112 while above $160 resistance is ahead near $180.

EOS/USD, 4-Hour Chart Analysis

Only a few of the major altcoins managed to follow Litecoin to a new swing high today, but EOS slightly extended its rally, despite being severely overbought from a short-term perspective. While the new high is a positive sign for the coming period, EOS remains only neutral in our trend model, and traders should wait for the oversold readings to be cleared before entering new positions.

XRP/USDT, 4-Hour Chart Analysis

While the leadership of the rally is still healthy, Ripple continues to lag the leaders, still fighting with the declining trendline that stopped the recent rally attempt in the coin. XRP is holding up above the $0.32 level, but it’s stuck below the recent swing high, and traders should still focus on the relatively stronger coins despite the short-term buy signal in our trend model.

From a long-term perspective, technicals remain negative, and a move towards the $0.28 and $0.26 levels remains likely. Further support zones are found near $0.32 and $0.30, while short-term targets are still ahead near $0.3550, and $$0.3750.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 468 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Analysis

Bitcoin Update: Reversal Right on Track

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On our February 13, 2019 update, we argued that Bitcoin’s (BTC/USD) bottom is likely in. While many crypto participants were heavily bearish about Bitcoin’s prospects, the market broke out of a continuation pattern and climbed over the $4,000 mark yesterday on Bitfinex. This left some in disbelief, which is exactly the reaction that we were expecting.

Nevertheless, many still hold on to their bearish stance. After all, it could also be argued that last week’s rally was nothing but a dead-cat bounce. They will probably laugh out loud if we say that Bitcoin’s reversal is underway. They can laugh all they want but recent events tell us that the reversal is right on track.

Multiple Resistances Breached

The price action on February 18 caught many market participants by surprise. That’s because it’s been a long time since Bitcoin followed through with a strong rally after a bullish move. Since February 2018, every bull rally was met by a stronger bear selloff. This resulted to four lower highs and eventually, the breakdown from $6,000.

Bitcoin lower highs from Feb 2018

With this trend, it seems logical that Bitcoin would once again post another lower high and continue its downward spiral. However, for the first time in a long while, Bitcoin defied bearish expectations. It rallied to $4,021 on Bitfinex on February 18 and breached multiple resistances in the process.

One major resistance that was taken out used to be the diagonal support that kept the market above $6,000. When Bitcoin breached this diagonal support, it acted as a heavy resistance. The February 18 rally enabled bulls to reclaim this support.

Diagonal support turned resistance and then turned support

On top of the diagonal resistance, Bitcoin also managed to go above our range midpoint as well as the 100-day moving average.

Bitcoin trading above range midpoint

It’s not just the price that enjoys multiple bullish breakouts. The daily RSI managed to print two breakouts in the last couple of months. The first one involves the breach of the diagonal resistance on December 18, 2018. At that time, Bitcoin flipped this resistance into support and relied on it to take out RSI resistance of 56. The move above 56 triggered the inverse head and shoulders breakout on the daily RSI. This tells us that momentum has swung to the side of the bulls.

RSI breakouts

Without these layers of resistances in terms of price and technical indicators, the bulls’ chances of winning the fight to reverse the market’s trend has significantly increased.

Toughest Resistance Ahead

While these technical developments can be really exciting, it is important to not give in to our emotions. Bitcoin’s biggest challenge is on the horizon.

Bitcoin is approaching our range high of $4,300. This resistance is unique because bears enjoy three layers of protection. The first one is the horizontal resistance, the second is the long-term diagonal resistance, and the last is the 200-day moving average.

Bitcoin resistances

Bulls need to generate tremendous momentum and volume to go above $4,300. A move above this level solidifies Bitcoin’s road to reversal.

Bottom Line

Even after the February 18 rally, many still hold firm to their bearish stance. However, a closer analysis of Bitcoin reveals that last week’s rally enabled bulls to take out multiple resistances. The breach of these resistances increases the chance of bulls to finally reverse the trend.

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 329 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Altcoins

Tron Price Analysis: TRX/USD Bulls Dealt a Blow as Bearish Daily Candlestick Eyed

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  • Tron (TRX) was forced to give up the recent run higher after closure in the red on Tuesday.
  • TRX/USD saw a bearish candlestick formation on the daily chart yesterday, somewhat of a shooting or evening star.

The Tron price after a decent push north over the past few sessions saw a minor slowdown on 19th February. TRX/USD gained around 12% from 15th-19th February, as the price managed to find its feet following a break of key support. An ascending trend line was initially running from the back-end of December 2018 up until a breach on 11th February.

At the daily close on 19th February, the candlestick formed somewhat of a bearish shooting or evening star. Should this play by the textbook, then it signals some further potential downside pressure to come. A confirmation of the price moving back south and possibly reversing the recent run of gains would need to see another bearish closure on the daily.

BitGo to Support Tron

Tron announced that BitGo is adding TRX to the list of cryptocurrencies that it supports later this year. BitGo is a digital asset financial services organization offering wallet and custody support. The company already accommodates the likes of bitcoin and Ethereum, plus over 100 other cryptocurrencies.

The CEO and founder of Tron Justin Sun commented following the announced:

“As TRON and its subsidiary BitTorrent work toward our vision of creating a new internet economy that is fast, secure, and cost-effective, we need to work with the companies that can provide that secure foundation. With BitGo, TRX investors will have the most secure wallet and custody options.”

Elsewhere the chief technology officer at BitGo spoke on the latest update to support Tron:

“As TRON and its subsidiary BitTorrent work toward our vision of creating a new internet economy that is fast, secure, and cost-effective, we need to work with the companies that can provide that secure foundation. With BitGo, TRX investors will have the most secure wallet and custody options.”

Technical Review – TRX/USD

As detailed above, the daily candlestick observed yesterday was a bearish closure, ending the run of gains seen of late. If there is to be additional selling pressure, the bears would need to force another close in the red. Should the momentum to the downside pick up the pace, then eyes will be on the next area of support. Daily comfort is provided at $0.023550 $0.021500, $0.018700 and then $0.01750-$0.01600.

In terms of upside targets, the bulls would be looking to break back above the breached ascending trend line. The resistance is currently tracking around $0.027500, and a push north of this could put TRX/USD in an excellent running to retest $0.030000 territory. A large amount of supply is noted through much of this area. If this is successfully broken down, then a fast move could take place up to $0.040000 region.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.            

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 125 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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